Carbon market in crisis

Friday, 14 September, 2007

It has emerged this week that the future of the NSW Greenhouse Gas Abatement Policy is on rocky ground.

Easy Being Green (EBG) issued a media release this week saying that the fall in the price of carbon from $12 to $6 was to blame, along with the federal government's recent announcement of plans for a national emissions trading scheme, and its intention to scrap all state-run schemes like GGAS.

According to EBG, major polluters stopped buying carbon under the NSW scheme because the long-term obligations have not been clear.

Paul Gliding, CEO of EBG, says that EBG's 240 full-time staff and contractors are currently going into 3000 homes per week, engaging the public in action on climate change.

"Without immediate action to secure the innovative and world leading NSW GGAS scheme, our company will have to cease all activity within days," he said.

In a separate media release, managing director of the Carbon Reduction Institute, Rob Cawthorne believes that companies only have themselves to blame for the sudden drop in the carbon market and that is has more to do with coincidence than the federal government's announcement of a national scheme.

"The main reason for the price drop is to be found in an oversupply of carbon credits created by the four biggest energy-efficient companies," he said.

"The NSW Greenhouse Gas Reduction Scheme has been oversupplied with carbon credits since its conception. In 2006, generators accounted for a majority of the required reductions through generation efficiencies, delivering over 80% of the required abatement. The remainder was covered by third-party abatement providers like Easy Being Green, Low Energy Supplies & Services and Fieldforce.

"If the same generation continues this year from generation alone, there will only be a need for 1.8 million credits from energy-efficiency projects, whilst approximately 11 million will be created. Considering the four major companies created a 6.7 million credit surplus last year, the oversupply from energy-efficiency activities will cover targets for the next four to eight years," he said.

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